Tobacco Industry Urges Regulatory Certainty to Sustain Economic Contribution
Jakarta — Indonesia’s Confederation of Tobacco Product Industry Associations has urged the government to establish regulatory certainty in order to preserve the industry’s sustainability, given its substantial contribution to the national economy.
Edy Sutopo, chairman of AMTI (Aliansi Masyarakat Tembakau Indonesia), stated in Jakarta on Tuesday that the tobacco product industry plays an important role in supporting grassroots economics and contributes significantly to government revenues.
According to him, industry stakeholders hope that government policies remain aligned with efforts to protect the tobacco product ecosystem, including safeguarding the millions of workers who depend on this sector for their livelihoods.
Therefore, he said business owners in the sector expect that all policies issued will consider industry sustainability whilst maintaining national economic stability.
He further conveyed a number of recommendations regarding several draft regulations derived from Government Regulation No. 28 of 2024 on implementing regulations of Law No. 17 of 2023 on Health.
The Confederation of Tobacco Product Industry Associations comprises the Indonesian Tobacco Community Alliance (AMTI), the Federation of Tobacco Cigarette Food-Beverage Workers’ Unions (FSP RTMM-SPSI), the All-Indonesia Workers’ Union (SPSI), the Indonesian Tobacco Farmers Association (APTI), the Indonesian Clove Farmers Association (APCI), the Indonesian Cigarette Factory Association (GAPPRI), the Indonesian White Cigarette Producers Association (GAPRINDO), and the Indonesian Cigarette Industry Community Forum.
According to the confederation, three draft policies are currently under government discussion: setting nicotine and tar content limits, banning additives, and standardising packaging or plain packaging.
Industry players believe these policies require comprehensive review to remain aligned with the characteristics of Indonesia’s national tobacco industry.
The confederation also noted that nicotine and tar content regulations have already been established through Indonesian National Standards (SNI) set by the National Standardisation Agency (BSN). The development of these standards involved various stakeholders, ranging from government and producers to consumers and experts.
Additionally, the Confederation of Tobacco Product Industry Associations reminded that the kretek cigarette industry, which uses local tobacco and clove raw materials, has different characteristics from foreign tobacco products.
Industry players have also emphasised the importance of maintaining the industry’s sustainability, which has consistently contributed significantly to government revenues.
The sector recorded contributions of over 200 trillion rupiah annually from excise receipts alone, not including other tax contributions.
Henry Najoan, chairman of GAPPRI, further noted that the use of additives has long been part of the character of tobacco products.
According to him, additives such as menthol, sugar, and cooling agents are used to enhance flavour and product character. If such prohibitions were implemented broadly, the legal cigarette industry would face difficulties in meeting existing requirements.
He also believed that such a situation could potentially create space for an increase in illegal cigarette circulation in the market.
Beyond the additives issue, the industry has also highlighted plans for packaging standardisation or plain packaging currently being discussed by the government. Business operators believe this policy could potentially eliminate brand identity that has been officially registered.
Benny Wachjudi, chairman of GAPRINDO, stated that industry players hope for constructive dialogue with the government to find a middle ground between public health interests and industry sustainability.
In this regard, the Confederation of Tobacco Product Industry Associations is also urging the government to promptly develop a roadmap for the national tobacco product industry and hold an audience with the President to create legal certainty for all business operators and workers in the sector.
Industry players hope that through dialogue and comprehensive roadmap development with the government, the tobacco product industry can continue to develop whilst maintaining a significant contribution to the economy, employment, and government revenues.
The government notes that the domestic tobacco product industry has an integrated ecosystem, which makes the sector an important employer.
The integration of the tobacco product sector domestically is due to its established tobacco drying industry, cigarette paper industry, cigarette filter industry, cigarette flavouring and essence industry, hand-rolled kretek industry, machine-rolled kretek industry, white cigarette industry, cigar industry, international-scale laboratories, and packaging and printing service industries supporting the tobacco product sector.